EAST HARTFORD, Conn. (WTNH) — Gov. Ned Lamont (D-Conn.) unveiled a legislative proposal that he said would provide tax relief for middle-class and working families.
At a press conference Monday morning in East Hartford, the governor rolled out his plan for what could be the first income tax cut in Connecticut since 1996 and the largest rate reduction since the income tax was implemented in 1991.
Right now, in Connecticut, single filers pay a 3% state personal income tax on their first $10,000 of adjusted gross income and a 5% tax on income up to $50,000. Joint filers also pay 3% on their first $20,000 of adjusted gross income and a 5% tax on income up to $100,000. Those who make less than $50,000 yearly would not pay a state income tax and still get Connecticut’s Earned Income Tax Credit.
Lamont wants to cut the 5% rate to 4.5% and the 3% rate to 2%. Depending on adjusted gross income, single filers could receive almost $300 in income tax relief, and joint filers could save nearly $600.
“Most of the tax cut overwhelmingly is going to go to people earning less than $100,000, and almost all of it goes to families that make less than $150,000 to $160,000.”
Lamont said it would save more than one million taxpayers more than $440 million a year. The only group of taxpayers that would not see relief are the millionaires.
If passed, taxpayers wouldn’t see the savings until Jan. 1, 2024. The Lamont administration said they want this cut to be permanent.
The state is sitting more than $3 billion in surplus, so why not start the income tax cut this summer? Lamont said his administration wants to use the current surplus to pay down long-term debt.
“If we go into a recession, we wouldn’t have to raise taxes, we wouldn’t have to change this tax, we would maintain our support for cities and education,” Lamont said.
Tracy Greenwood of East Hartford said her family would benefit from the tax cut.
“Food is very expensive, double sometimes for some things when I bought last year, my grocery now has almost doubled and tripled, and it’s really going to benefit my family a lot,” Greenwood said.
There is support from Republicans who say they proposed a bigger income tax cut last year, and they are glad the governor caught the proverbial football pass.
“Senate Republicans proposed $1.2 billion in tax relief last year, but our plan was rejected by majority Democrats in the legislature,” Senate Republican Leader Kevin Kelly (R-Stratford) said. “Connecticut taxpayers deserve significant and immediate widespread tax relief, and Republicans will continue to fight for them.”
“Anything we can do to make it more affordable for our families needs to be embraced,” said State Rep. Holly Cheeseman, R-East Lyme, the ranking member on the Finance, Bonding and Revenue Committee. “We would like to see more aggressive cuts for people making more than $50,000 a year or $100,000 for couples. Connecticut is an expensive state.”
“While this proposal does not eliminate the egregious income tax as Yankee Institute has been advocating for years, it is a welcome step in the right direction,” Yankee Institute President Carol Platt Liebau said. “We hope the governor and General Assembly will expand on the plan by encouraging an inclusive cut that is broad-based and equitable across every tax bracket.”
The governor’s previously announced proposals include increasing Connecticut’s Earned Income Tax Credit and reducing taxes for small businesses.
Lamont will deliver his annual budget address to the General Assembly on Wednesday, Feb. 8, at noon.